CITY leaders in York are to be asked to support continuing a contract with a private firm for a controversial £1.4 billion waste incinerator, as pulling out of the deal would cost two councils more than £3 million in total.

North Yorkshire County Council approved the Allerton Waste Recovery Park, between York and Knaresborough – a joint scheme with City of York Council – last October. But the Government withdrew £65 million of private finance initiative funding in February, saying the plant was no longer needed.

A report on the issue will go before the York council’s cabinet next month and officials said it would recommend the continuation of the contract between the county council and AmeyCespa, which would operate the incinerator through a 25-year arrangement.

Roger Ranson, City of York Council’s assistant director of city and environmental services, said: “We remain focused on delivering the Allerton Waste Recovery Park by 2016/17 and are working closely with the county council to address the financial affordability, following the withdrawal of PFI credits.”